The Nordic Aviation Group is looking for pilots abroad while at least another 30 qualified cockpit staff are in Estonia. The pilots are reluctant to take up work with the new state-owned airline because of its staffing model, lower salary, and working conditions.

There are about 50 pilots in Estonia qualified to fly NAG’s Bombardier CRJ aircraft. Only 18 do so far. One reason is that while pressure on pilots was high already in Estonian Air, the business model of NAG pays even less, as the Estonian Airline Pilots Association said to ERR News last November.

NAG does not employ pilots, but instead sources crews from Nordic Crew Management (NCM), who officially employs the pilots. Second, NCM shoulders the pilot training burden, providing a full package to NAG.

As a company operating in a tough market, this is an advantage for NAG. According to Anton Õnnik, responsible for the airline's operations, this improves effectiveness and reflects the labour market, where a lot of pilots are available.

Pilots complained last year that NCM pays about a third less than Estonian Air did. The roughly 30% lower income they are forced to accept if they want to be based in Tallinn is due to the fact that NCM adds a fee to the cost of their work, and the changed market conditions.

The pilots disagree with the company’s role in the Estonian market. In the opinion of an insider of the aviation business who asked to remain unnamed, NCM’s offer is a “shameless abuse” of the fact that their families are here and their lives are in Estonia.

Helen Reinhold of the Estonian Airline Pilots Association estimates that NAG could immediately double its number of cockpit staff if it hired pilots directly, even to the current conditions as NCM dictates them.

According to pilots who received offers, NCM pays pilots a base salary according to how experienced they are. Pilots are then paid an additional sum per number of hours flying.

Sick and tired pilots

This no-fly-no-pay model has the disadvantage that pilots receive no compensation beyond the base when they are ill or tired. With low base salaries, pilots are forced to fly no matter what to make a living.

The European Cockpit Association (ECA), the Swiss Airbus pilots union Aeropers, and the Estonian Airline Pilots Association all confirmed to ERR News that the outsourcing model increased the number of tired and ill pilots in the air.

This leads to unsafe situations. In August 2013, the British Civil Aviation Authority reported a flight where both pilots had been asleep at the same time. In a 2009 US case, a flight overshot its destination because the pilots were tired and distracted.

Pilots pay to fly

Airlines operating so-called pay-to-fly schemes make the situation even worse. Pilots’ licenses depend on their experience with individual plane types, measured in hours spent flying aircraft. Under pay-to-fly, pilots pay their employer for training and flight hours in order to log the time needed to acquire their license. A pilot often must pay tens of thousands of euros, a sum deducted from their pay.

Through Nordic Crew Management, NAG hires for a base salary plus hours flown, and at the same time hires based on pay-to-fly, which creates deductions to an already performance-dependent salary.

This practice seems smart from a business point of view: there are plenty of pilots, and competition for jobs is high. But how far can an airline’s business model optimize costs before affecting safety? NAG’s Anton Õnnik defends the practice, pointing to the high quality of pilots’ training in general, and the regular intervals at which they have to pass tests.

Õnnik also notes current changes in the airline industry, and the fact that a new player must operate at maximum efficiency to be able to survive. He sees no drawbacks when it comes to passenger safety.

The European Cockpit Association (ECA) in Brussels disagrees. Clemens Kopetz, who flies the Airbus A330 plane for Swiss International Airlines and serves as the ECA’s Professional Affairs Director, told ERR News that such employment schemes were dangerous because they undermined air travel safety.

“That a pilot has to pay to gain experience, and that they compete with regularly employed colleagues for time spent flying, is unacceptable,” Kopetz said, commenting on the pay-to-fly hiring policy. He added that a pilot paid by the hour would immediately miss out on money if they fell ill, and said that because of this, such hiring policy undermined airline safety standards that had evolved over time.

Commenting on the airlines’ argument that this kind of hiring scheme was made necessary by a very competitive market, Kopetz said that there were plenty of airlines in the low cost market segment that operated successfully without such schemes.

The combination of a low base salary plus hourly pay with pay-to-fly seems to make working for NAG much less attractive. Finding pilots gets harder, which is why they are now employing British hiring company Zenon to look for candidates abroad as well.

The Nordic Aviation Group is off to a rough start. Despite having transported 17,267 passengers in January, at 568 flights in the same month this means that they could only fill their planes to less than 60% on average, considering the capacity of the planes that currently fly for them.

The International Air Transport Association estimates that in 2016 a European airline will need to reach at least 62.7% to operate at cost, and more than that to make a profit. Although this can vary greatly from airline to airline, competition remains fierce.

The Ministry of Social Affairs is passing around a possible bill that would allow Estonia to apply for support with the European Globalization Adjustment Fund (EGF) in connection with large-scale layoffs at the shale oil producer Viru Keemia Grupp.

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Former employees of the bankrupt national carrier Estonian Air turned to court in the matter of their representation on the bankruptcy committee, the Baltic News Service reported on Thursday. The Estonian Air Line Pilots Association won’t accept representation by Tallinna Lennujaama AS, itself a state-owned business.

The low oil price on the global market affects several large employers in Estonia. Viru Keemia Grupp recently announced layoffs, and Eesti Energia and Kiviõli Keemiatööstus are suffering as well. The latter, owned by oil company Alexela, is not currently considering letting people go, spokesman Marti Hääl said.

The Ministry of Economic Affairs and Communication as well as the Nordic Aviation Group (NAG) said on Tuesday that no insider information was involved in the Nordic Aviation Academy taking over pilot training. The ministry left the question of conflicts of interest unanswered.

External finance is being considered as an option for the project of overhauling the dam across Väike Väin Strait between the West Estonian islands of Saaremaa and Muhumaa, the regional newspaper Saarte Hääl reported.

According to Erik Sakkov, management board member of the Nordic Aviation Group (NAG), Toomas Uibo serving on the company’s supervisory board doesn’t constitute a conflict of interest because the supervisory board does not actively participate in leading the company.

The Nordic Aviation Group is looking for pilots abroad while at least another 30 qualified cockpit staff are in Estonia. The pilots are reluctant to take up work with the new state-owned airline because of its staffing model, lower salary, and working conditions.

A bill to legalize ride-sharing services such as Uber, Taxify, Hopp and Wisemile as a new category of service called "negotiated passenger transport" will reach the Riigikogu next week, Postimees reported.

Nasdaq and the Estonian state announced that Estonia's e-residency platform will be facilitating a blockchain-based e-voting service. This will allow shareholders of companies listed on Nasdaq's Tallinn stock exchange to vote in meetings without being physically present.

A former CEO of EG Ehitus, a subsidiary of Eesti Gaas, apparently made payments in the amount of two million euros for dealings with a company either he himself or his business partners were managing at the time.

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The North prefecture of the Estonian Police and Border Guard insists that drivers transporting passengers using the Uber app must have a corresponding operating license, and that doing it without a license constitutes an act of misdemeanor.

Minister of Entrepreneurship Liisa Oviir (SDE) would like to replace Enterprise Estonia, the Development Fund, and Kredex with only two institutions to support new businesses. A new development bank and an entrepreneurship agency could also cover efforts by other state institutions to foster business development.

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Estonia's Port of Tallinn is in talks with several investors over building a refinery capable of processing 3-6 million tons of crude oil per year. The new refinery would be built at the Paldiski South Port.

Approximately 40,000 square meters of new retail area is to be completed in the shopping centers of Tallinn during 2016, and most of it will be located in the less-saturated boroughs of Lasnamäe, Mustamäe and North-Tallinn, an overview compiled by the Uus Maa real estate company says.

The Estonian software start-up Teleport announced earlier today that Jeffrey D. Levine, US Ambassador to Estonia until autumn last year, has joined their team. Levine is one of several former US diplomats working with companies in this part of Europe.

The Government is looking for new sources of revenue. To support local infrastructure, recent administration reform proposals suggest the introduction of a visitor’s tax. Minister of Entrepreneurship Liisa Oviir says more research is necessary.

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